A firm is considering the purchase of a new machine to increase the output of an existing
Question:
A firm is considering the purchase of a new machine to increase the output of an existing production process of all the machines considered the management van narrowed the field to the machines represented by the cash flows shown as follows Machine 1 Initial Investment ($50,000). Annual Operating Income ($22.015) Machine 2. Initial Investment (-$60,000). Annual Operating Income(525,995) Machine 3: ($75,000). Annual Operating Income (532.116) Machine 4 (580,000) Annual Operating Income (534,371) Machine 5 (-$100,000). Annual Operating Income (542,485) If each of these machines provides the name service for 3 years and the minimum attractive rate of return is 12% which machine should be selected
a. Machine 2
b. Machine 3
c. Machine 4
d. Machine 1
e. Machine 5
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling